The on-going trade-war between the US and China has sent alarm bells ringing in Asian markets, and where the entire global growth is concerned, India could, however, be the gainer if it plays its cards right.
India can now capture the Chinese commodity market vacated by US exports, following the trade war between the world’s two biggest economies China and US, according to a study of a commerce department.
The latest study has analysed and found at least 100 products where India can replace the US export market to China. As a result, where China will be benefitting from the higher import duty Beijing has imposed on products originating in the US.
According to market analysts, India can grab a bigger share of the Chinese market for cotton, corn, almonds, wheat and grain sorghum, and these retaliatory tariffs would provide a window of opportunity for enhancing India’s export to China.
While, India too has already drawn a list of goods which it can export to China, replacing the US export goods that have become costlier due to the trade war between China and the US, and is also considered as an advantage for India’s global approach.
India has identified more than 40 products, according to reports, including fresh grapes, cotton linters, flue cured tobacco and alloy steel seamless boiler, where it is positioned at one step ahead of the US trade market in China, said sources.
Furthermore, boosting exports will help India reduce $63 billion trade deficit it runs with China, which is also New Delhi’s largest commercial partner.
According to a study, India is strong in its capability to export around 20 products such as bovine meat and almonds, though it faces some market access issues in China.
With the increased trade tension between the two economies, China recently started importing soybean from Brazil after slapping a 25 per cent tariff on the oilseed’s shipments from the US. Meeting between Chinese and US officials, which was held last week managed to make a little progress by setting the stage for US to push ahead with the next round of tariffs, on up to $200 billion worth of Chinese commodities.
An Indian study has found that at least 80 more items have potential for export to the northern neighbouring country China. Following that study it was reported that the Indian government has instructed its departments and industry bodies to work out on strategies to ramp up productions in some sectors where India has a clear opportunity.
According to several reports, the commerce ministry of Indian government has asked the China embassy to be an enabler, while offering business to business meetings for Indian exporters, who have an eye on global market.
One of the major impacts that could happen due to the trade-war, is, that there will be a lot of reorganization and reconfiguration of supply chains, and India might become part of some production chains, according to Amitendu Palit, a senior research fellow at the Institute of South Asian Studies, National University of Singapore.
The Modi-Xi meetings held earlier and the bilateral meetings between the officials of the two countries has also created a pitch for India-China economic relation.
As Prime Minister Modi earlier stated that, the countries have discussed their respective visions and have set priorities for national development in the context of current and future international scenario. They would also review the developments in Indo-China relations from a strategic and long term perspective.
Though, it is too early to conclude that India will have immediate gains due to the trade war, but economist and commercial analysts are seeing a hope of ray for a new beginning of Indo-China relationship.